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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into
this 1st day of July, 1997, to be effective on July 1, 1997 (the "Effective
Date"), by and between MiliRisk, Inc., a Texas corporation ("Employer"), and F.
Xxxxxx Xxxxxx, III, a resident of Texas ("Employee").
W I T N E S S E T H:
WHEREAS, Employer is a corporation engaged in business in the State of
Texas and throughout the United States;
WHEREAS, Employer desires to employ Employee in the capacity of
Chairman of the Board, President, and Chief Executive Officer, upon the terms
and conditions hereinafter set forth; and
WHEREAS, Employee is willing to enter into this Agreement with respect
to his employment and services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, Employer hereby employs Employee and Employee
hereby accepts such employment upon the terms and conditions hereinafter set
forth:
1. Term of Employment. The term of employment under this
Agreement shall be for a period of three (3) years, commencing on the Effective
Date and terminating on June 30, 2000, unless such employment is terminated or
extended prior to the expiration of said period as hereinafter provided.
2. Duties of Employee.
(a) Chairman of the Board, President and Chief Executive
Officer. Employee agrees that during the term of this Agreement, he
will devote his professional and business-related time, skills and
best efforts to the businesses of Employer in the capacity of Chairman
of the Board, President, and Chief Executive Officer, or such other
capacity as Employer and Employee may agree upon. If there are major
significant changes in the duties or responsibilities of Employee from
those listed as Prohibited Activities on Exhibit A attached hereto,
that are not mutually agreed upon, Employee may terminate his
employment within sixty (60) days of any such change. In addition,
Employee shall devote all necessary time and his best efforts in the
performance of any other duties as may be assigned to him from time to
time by the Board of Directors of Employer including, but not limited
to, serving on Employer's Board of Directors if elected. Employee
shall devote his full professional and business skills to Employer as
his primary responsibility. Employee may engage in personal, passive
investment activities provided such activities
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do not interfere with the performance of his duties hereunder and
violate the noncompetition and nondisclosure provisions set forth
herein.
(b) Other Positions. Employer acknowledges and agrees
that, during the term of this Agreement, Employee will devote some of
his professional and business-related time, skills and best efforts to
the businesses of The Millers Mutual Fire Insurance Company and The
Millers Casualty Insurance Company in the capacity of Vice Chairman of
the Board and that Employee may receive compensation from such
companies for his services including participation in The Millers
Mutual Fire Insurance Company Deferred Incentive Compensation Program
(the "Program") in accordance with the terms of the Program in effect
during his employment. In addition, nothing herein shall be construed
to prohibit Employee from serving on the boards of non-competitive
businesses or non profit community organizations or similar entities.
3. Compensation.
(a) Base Salary. Employer shall pay Employee an annual
base salary of Three Hundred Fifty Thousand Dollars ($350,000.00) per
annum (or fraction for portions of a year). Such base salary will be
adjusted from time to time in accordance with then current standard
salary administration guidelines of Employer. Employee's salary shall
be subject to all appropriate federal and state withholding taxes and
shall be payable in accordance with the normal payroll procedures of
Employer.
(b) Annual Bonus. In addition to the salary set forth in
Section 3(a) hereof, Employee shall receive a bonus each year during
the term of this Agreement in an amount equal to a percentage of a
certain net income target set for each year as established annually in
an annual planning session. If 100% or more of such annual target is
achieved in any year, Employee shall receive in such year a bonus of
50% of his base salary (the "Maximum Bonus"). If less than 100% of
such target is achieved in any year, Employee shall receive in such
year a bonus of a certain percentage of the Maximum Bonus as
determined in accordance with Schedule 3(b) attached hereto.
(c) Stock Options. Employee shall be granted stock
options for shares of common stock of Employer pursuant to the terms
of a Stock Option Agreement granted under the MiliRisk, Inc. 1997
Stock Option Plan, as amended, a copy of which has been provided to
Employee. The number of shares of common stock, exercise price and
date of grant for such options is set forth on Schedule 3(c) attached
hereto.
(d) Automobile Allowance. During the term of this
Agreement, Employer shall provide Employee with a monthly automobile
allowance of One Thousand Dollars ($1,000.00). Such allowance shall
be paid by Employer to Employee on the first workday of each month or
on such other day during the month as Employer and Employee shall
mutually determine.
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(e) Phone Allowance. During the term of this Agreement,
Employer shall provide Employee with a monthly phone allowance of
Fifty Dollars ($50.00). Such allowance shall be paid by Employer to
Employee on the first workday of each month or on such other day
during the month as Employer and Employee shall mutually determine.
4. Fringe Benefits. The terms of this Agreement shall not
foreclose Employee from participating with other employees of Employer in such
fringe benefit or incentive compensation plans as may be authorized and adopted
from time to time by Employer; provided, however, that Employee must meet any
and all eligibility provisions required under said fringe benefit or incentive
compensation plans. Employee may be granted such other fringe benefits or
perquisites as Employee and Employer may from time to time agree upon.
5. Vacations. Employee shall be entitled to the number of paid
vacation days in each calendar year as shall be determined by the Board of
Directors of Employer from time to time. In no event, however, shall Employee
be entitled to less than four weeks paid vacation during each calendar year.
6. Reimbursement of Expenses. Employer recognizes that Employee
will incur legitimate business expenses in the course of rendering services to
Employer hereunder. Accordingly, Employer shall reimburse Employee, upon
presentation of receipts or other adequate documentation, for all necessary and
reasonable business expenses incurred by Employee in the course of rendering
services to Employer under this Agreement.
7. Working Facilities. Employee shall be furnished an office,
personal secretary and such other facilities and services suitable to his
position and adequate for the performance of his duties, which shall be
consistent with the policies of Employer.
8. Termination. The employment relationship between Employee and
Employer created hereunder shall terminate before the expiration of the stated
term of this Agreement upon the occurrence of any one of the following events:
(a) Death or Permanent Disability. The death or
permanent disability of Employee. For the purpose of this Agreement,
the "permanent disability" of Employee shall mean Employee's
inability, because of his injury, illness, or other incapacity
(physical or mental), to perform the essential functions of the
position contemplated herein, with or without reasonable accommodation
to Employee with respect to such injury, illness or other incapacity,
for a continuous period of 150 days or for 180 days out of a
continuous period of 360 days. Such permanent disability shall be
deemed to have occurred on the 150th consecutive day or on the 180th
day within the specified period, whichever is applicable.
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(b) Termination for Cause. The following events, which
for purposes of this Agreement shall constitute "cause" for
termination:
(1) The willful breach by Employee of any
provision of Sections 2, 11, 12, or 13 hereof (including but
not limited to a refusal to follow lawful directives of the
Board of Directors of Employer) after notice to Employee of
the particular details thereof and a period of 10 days
thereafter within which to cure such breach and the failure of
Employee to cure such breach within such 10 day period;
(2) Any act of fraud, misappropriation or
embezzlement by Employee with respect to any aspect of
Employer's business;
(3) The illegal use of drugs by Employee during
the term of this Agreement that, in the determination of the
Board of Directors of Employer, substantially interferes with
Employee's performance of his duties hereunder;
(4) Substantial failure of performance by
Employee that is repeated or continued after 30 day written
notice to Employee of such failure and that is reasonably
determined by the Board of Directors of Employer to be
materially injurious to the business or interests of Employer
and which failure is not cured by Employee within such 30 day
period; or
(5) Conviction of Employee by a court of
competent jurisdiction of a felony or of a crime involving
moral turpitude.
Any notice of discharge shall describe with reasonable
specificity the cause or causes for the termination of Employee's
employment, as well as the effective date of the termination (which
effective date may be the date of such notice). If Employer
terminates Employee's employment for any of the reasons set forth
above, Employer shall have no further obligations hereunder from and
after the effective date of termination (other than as set forth
below) and shall have all other rights and remedies available under
this or any other agreement and at law or in equity.
(c) Termination by Employee with Notice. Employee may
terminate this Agreement without liability to Employer arising from
the resignation of Employee upon one (1) year written notice to
Employer. Employer retains the right after proper notice of
Employee's voluntary termination to require Employee to cease
employment immediately; provided, however, in such event, Employer
shall remain obligated to pay Employee his salary during the one (1)
year notice period or the remaining term of this Agreement, whichever
is less. During such one (1) year notice period, Employee shall
provide such consulting services to Employer as Employer may
reasonably request and shall assist Employer in training his successor
and generally preparing for an orderly transition.
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(d) Termination by Employer with Notice. Employer may
terminate this Agreement at any time upon one (1) year written notice
to Employee; provided, however, upon such notice Employee shall not be
required to perform any services for Employer other than during the
period of three (3) months immediately following the receipt of such
notice of termination in which Employee shall assist Employer in
training his successor and generally preparing for an orderly
transition.
9. Compensation Upon Termination.
(a) General. Upon the termination of Employee's
employment under this Agreement before the expiration of the stated
term hereof for any reason, Employee shall be entitled to (i) the
salary earned by him before the effective date of termination, as
provided in Section 3(a) hereof, prorated on the basis of the number
of full days of service rendered by Employee during the year to the
effective date of termination, (ii) any accrued, but unpaid, vacation
or sick leave benefits, (iii) any authorized but unreimbursed business
expenses, and (iv) any accrued, but unpaid annual bonus.
(b) Termination For Other Than Cause. If such
termination is the result of the discharge of Employee by Employer for
any reason other than (i) his death or permanent disability, (ii) by
Employer or Employee with notice pursuant to Section 8(d) or 8(c),
respectively, or (iii) for cause (as defined in Section 8(b) hereof),
then Employee shall be entitled to receive as a severance payment an
amount equal to the salary (excluding bonuses) that Employee would
have received for the remainder of the term of this Agreement in
accordance with the regular payroll periods during the remainder of
the term of this Agreement. If Employee's employment hereunder
terminates because of the death of Employee, all amounts that may be
due to him under the terms of this Agreement shall be paid to his
administrators, personal representatives, heirs and legatees, as may
be appropriate.
(c) Termination For Cause. If the employment
relationship hereunder is terminated by Employer for cause (as defined
in Section 8(b) hereof), Employee shall not be entitled to any
severance compensation, except as provided in Section 9(a) above.
(d) Termination by Employer with Notice. If the
employment relationship is terminated by Employer other than for cause
or the permanent disability of Employee, then Employee shall be
entitled to receive as a severance payment and as compensation for all
services performed hereunder pursuant to Section 8(d) hereof an amount
equal to the salary that Employee would have received for the
remainder of the term of this Agreement or one (1) year, whichever is
less, in accordance with the regular payroll periods of Employer
during the applicable period.
(e) Termination by Employee with Notice. If the
employment relationship is terminated by Employee pursuant to the
provisions of Section 8(c) hereof, Employee shall be entitled to
receive as a severance payment and as compensation for all services
performed hereunder pursuant to Section 8(c) hereof the salary that
Employee would have
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received for the remainder of the term of this Agreement or one (1)
year, whichever is less, in accordance with the regular payroll period
of Employer during the applicable period.
(f) Survival. The provisions of Sections 9, 11, 12, and
13 hereof shall survive the termination of the employment relationship
hereunder and this Agreement to the extent necessary or reasonably
appropriate to effect the intent of the parties hereto as expressed in
such provisions.
10. Other Agreements. This Agreement shall be separate and apart
from, and shall be deemed to alter the terms of, any executive compensation
agreements, deferred compensation agreements, bonus agreements, general
employment benefits plans, stock option plans and any other plans or agreements
entered into between Employee and Employer pursuant to which Employee has been
granted specific rights, benefits or options.
11. Noncompetition. Employee agrees that, during his employment
with Employer and for a period of three (3) years from the date of termination
of his employment with Employer, he will not directly or indirectly compete
with Employer by engaging in the activities set forth on Exhibit A attached
hereto and incorporated herein by reference (the "Prohibited Activities")
within the geographic area that is set forth on Exhibit B attached hereto (the
"Restricted Area"). For purposes of this Section 11, Employee recognizes and
agrees that Employer conducts and will conduct business in the entire
Restricted Area and that Employee will perform his duties for Employer within
the entire Restricted Area. Employee shall be deemed to be engaged in and
carrying on the Prohibited Activities if he engages in the Prohibited
Activities in any capacity whatsoever, including, but not limited to, by or
through a partnership of which he is a general or limited partner or an
employee engaged in such activities, or by or through a corporation or
association of which he owns five percent (5%) or more of the stock or of which
he is an officer, director, employee, member, representative, joint venturer,
independent contractor, consultant or agent who is engaged in such activities.
Employee agrees that during the three (3) year period described above, he will
notify Employer of the name and address of each employer with whom he has
accepted employment during such period. Such notification shall be made in
writing within five (5) days after Employee accepts any employment or new
employment by certified mail, return receipt requested.
12. Confidential Data. Employee further agrees that, during his
employment with Employer and thereafter, he will keep confidential and not
divulge to anyone, disseminate nor appropriate for his own benefit or the
benefit of another any confidential information described in Exhibit C attached
hereto and incorporated by reference herein (the "Confidential Data").
Employee hereby acknowledges and agrees that this prohibition against
disclosure of Confidential Data is in addition to, and not in lieu of, any
rights or remedies that Employer may have available pursuant to the laws of any
jurisdiction or at common law to prevent the disclosure of trade secrets, and
the enforcement by Employer of its rights and remedies pursuant to this
Agreement shall not be construed as a waiver of any other rights or available
remedies that it may possess in law or equity absent this Agreement.
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13. Nonsolicitation of Employees. Employee covenants that, during
his employment with Employer and for a period of one (1) year from the date of
termination of his employment with Employer, he will not (i) directly or
indirectly induce or attempt to induce any employee of Employer to terminate
his or her employment or (ii) without prior written consent of Employer, offer
employment either on behalf of himself or on behalf of any other individual or
entity to any employee of Employer or to any terminated employee of Employer.
14. Property of Employer. Employee acknowledges that from time to
time in the course of providing services pursuant to this Agreement he shall
have the opportunity to inspect and use certain property, both tangible and
intangible, of Employer and Employee hereby agrees that such property shall
remain the exclusive property of Employer, and Employee shall have no right or
proprietary interest in such property, whether tangible or intangible,
including, without limitation, Employee's customer and supplier lists, contract
forms, books of account, computer programs and similar property.
15. Equitable Relief. Employee acknowledges that the services to
be rendered by him are of a special, unique, unusual, extraordinary, and
intellectual character, which gives them a peculiar value, and the loss of
which cannot reasonably or adequately be compensated in damages in an action at
law, and that a breach by him of any of the provisions contained in this
Agreement will cause Employer irreparable injury and damage. Employee further
acknowledges that he possesses unique skills, knowledge and ability and that
competition by him in violation of this Agreement or any other breach of the
provisions of this Agreement would be extremely detrimental to Employer. By
reason thereof, Employee agrees that Employer shall be entitled, in addition to
any other remedies it may have under this Agreement or otherwise, to injunctive
and other equitable relief to prevent or curtail any breach of this Agreement
by him.
16. "Change of Control". In the event (each such event, a "Change
of Control"): (1) Employer becomes a subsidiary of another corporation or
entity or is merged or consolidated into another corporation or entity or
substantially all of the assets of Employer are sold to another corporation or
entity; or (2) any person, corporation, partnership or other entity, either
alone or in conjunction with its "affiliates," as that term is defined in Rule
405 of the General Rules and Regulations under the Securities Act of 1933, as
amended, or other group of persons, corporations, partnerships or other
entities who are not "affiliates" but who are acting in concert, becomes the
owner of record or beneficially of securities of Employer that represent
thirty-three and one-third percent (33 1/3%) or more of the combined voting
power of Employer's then outstanding securities entitled to elect Directors; or
(3) the Board of Directors of Employer or a committee thereof makes a
determination in its reasonable judgment that a "Change of Control" of Employer
has taken place; the term during which this Agreement shall be effective shall
include the remaining term of this Agreement following the date of the Change
of Control plus two (2) years, and Employee's compensation for such period
shall be based on the following formula, shall be subject to the following
conditions, and shall be in lieu of the compensation provided for under Section
3 of this Agreement and in lieu of the compensation upon termination provided
for under Section 9 of this Agreement (except for Section 9(a), which shall
still apply):
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(a) Employee shall be paid an annual salary for the
remaining term of this Agreement plus two (2) years consisting of one
hundred percent (100%) of the average amount of total cash
compensation, excluding payments made under the Program and tax
benefit bonuses paid upon the lapse of resale restrictions on common
stock for certain officers, of Employee for the two (2) calendar years
prior to the Change of Control.
(b) Employee shall be paid an annual amount for the
remaining term of this Agreement plus two (2) years in consideration
of the noncompetition covenant of Section 11 of this Agreement
consisting of fifty percent (50%) of the average amount of total cash
compensation, excluding payments made under the Program and tax
benefit bonuses paid upon the lapse or resale restrictions on common
stock for certain officers, of Employee for the two (2) calendar years
prior to the Change of Control. Such annual amounts shall be paid
quarterly in advance.
(c) Notwithstanding any of the provisions of this
Agreement, the amount of all payments to be made pursuant to this
Section 16 after a Change of Control shall not exceed one dollar
($1.00) less than that amount that would cause any such payment to be
deemed a "parachute payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and as Section
280G of the Code is then in effect at the time of such payment.
(d) Any payments made to Employee following a Change of
Control that shall be disallowed, in whole or in part, as a deductible
expense to Employer for Federal income tax purposes by the Internal
Revenue Service on the basis that Section 280G of the Code prohibits
such deduction shall be reimbursed by Employee to the full extent of
such disallowance within six (6) months after the date of which the
amount of such disallowance has been finally determined and Employer
has paid the deficiency with respect to such disallowance. Employer
shall legally defend any proposed disallowance by the Internal Revenue
Service and the amount required to be reimbursed by Employee shall be
the amount determined by an appropriate court in a final,
nonappealable decision that is actually disallowed as a deduction. In
lieu of payment to Employer by Employee, Employer may, in its
discretion, withhold amounts from Employee's future compensation
payments until the amount owed to Employer has been fully recovered.
No such withholding shall occur prior to the date on which Employee
would be required to make reimbursement as provided herein.
(e) If the limitation set forth in this Section 16(c) may
at any time become applicable to the amounts otherwise due pursuant to
paragraphs (a) and (b) of Section 16, then Employer shall continue to
pay Employee all amounts as provided under paragraphs (a) and (b) of
Section 16 until such time as cumulative payments equal the aggregate
amount as limited by paragraph (c), and Employee may terminate his
employment relationship with Employer on three (3) months notice at
any time within the last twelve (12) months of the time period during
which the payments described in this Section 16(e) will be paid
without affecting his rights to receive such payments.
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(f) Employer shall have no obligation to pay the amounts
set forth in paragraphs (a) and (b) of Section 16 as limited by
paragraph (c) if there is reasonable proof that the noncompetition or
confidential data provisions of Sections 11 and 12, respectively, of
this Agreement are being violated.
(g) In the event the employment relationship is
terminated for cause (pursuant to Section 8(b) hereof) following a
Change of Control, Employer shall not be obligated to make any further
payments of the compensation amounts provided for in this Agreement,
except as provided in Section 9(a) above. Notwithstanding any other
provision of this Agreement, except for paragraphs (e) and (j) of this
Section 16, which shall control in the event Employee terminates
employment as provided in paragraphs (e) and (j), in the event
Employee voluntarily terminates employment following a Change of
Control for other than Good Reason, as defined hereinafter,
compensation amounts set forth in paragraphs (a) and (b) shall be
payable only for a one (1) year period following termination of
employment.
"Good Reason" to terminate employment with Employer occurs if:
(1) duties are assigned that are materially inconsistent with previous
duties; (2) duties and responsibilities are substantially reduced; (3)
base compensation is reduced not as part of an across the board
reduction for all senior officers or executives; (4) participation
under compensation plans or arrangements generally made available to
persons at Employee's level of responsibility at Employer is denied;
(5) a successor fails to assume this Agreement; or (6) termination is
made without compliance with prescribed procedures.
(h) In the event Employee is involuntarily terminated by
Employer without cause, Employee voluntarily terminates employment for
Good Reason or the employment relationship is terminated by death or
permanent disability of Employee, Employer's obligation to pay the
compensation amounts provided in this Section 16 shall survive
termination of employment.
(i) In the event of termination of employment during the
pendency of a "Potential Change of Control", as hereinafter defined,
paragraphs (g) and (h) of this Section 16 shall apply as if an actual
Change of Control had taken place. A "Potential Change of Control"
shall be deemed to have occurred if: (1) Employer has entered into an
agreement or letter of intent the consummation of which would result
in a Change of Control; (2) any person publicly announces an intention
to take or to consider taking actions that, if consummated, would
constitute a Change of Control; or (3) the Board of Directors of
Employer or a committee thereof in its reasonable judgment makes a
determination that a Potential Change of Control for purposes of this
Agreement has occurred. A Potential Change of Control remains pending
for purposes of receiving payments under this Agreement until the
earlier of the occurrence of a Change of Control or a determination by
the Board of Directors or a committee thereof (at any time) that a
Change of Control is no longer reasonably expected to occur.
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(j) Notwithstanding anything contained in this Agreement
to the contrary, Employee and Employer, or the person, corporation,
partnership or other entity acquiring control of Employer pursuant to
this Section 16, with the concurrence of the Chief Executive Officer
and Compensation Committee of the Board of Directors of Employer, may
mutually agree that Employee, with three (3) months' notice, may
terminate his employment and receive a lump sum payment equal to the
present value of remaining payments under this Agreement discounted by
the then current Treasury Xxxx rate for the remaining term of this
Agreement.
17. Successors Bound. This Agreement shall be binding upon
Employer and Employee, their respective heirs, executors, administrators or
successors in interest, including without limitation, any corporation,
partnership or other entity acquiring control of Employer pursuant to Section
16 hereof.
18. Severability and Reformation. The parties hereto intend all
provisions of this Agreement to be enforced to the fullest extent permitted by
law. If, however, any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future law, such provision shall be
fully severable, and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof, and the
remaining provisions shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance.
19. Integrated Agreement. This Agreement constitutes the entire
Agreement between the parties hereto with regard to the subject matter hereof,
and there are no agreements, understandings, specific restrictions, warranties
or representations relating to said subject matter between the parties other
than those set forth herein or herein provided for.
20. Attorneys' Fees. If any action at law or in equity, including
any action for declaratory or injunctive relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees from the nonprevailing party,
which fees may be set by the court in the trial of such action, or may be
enforced in a separate action brought for that purpose, and which fees shall be
in addition to any other relief which may be awarded.
21. Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, mailed by certified mail (return
receipt requested) or sent by overnight delivery service, cable, telegram,
facsimile transmission or telex to the parties at the following addresses or at
such other addresses as shall be specified by the parties by like notice:
(a) If to Employer: MiliRisk, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Attention: Secretary
Facsimile No.: (000) 000-0000
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(b) If to Employee: F. Xxxxxx Xxxxxx, III
6229 Kenwick
Xxxx Xxxxx, Xxxxx 00000
Notice so given shall, in the case of notice so given by mail, be
deemed to be given and received on the fourth calendar day after posting, in
the case of notice so given by overnight delivery service, on the date of
actual delivery and, in the case of notice so given by cable, telegram,
facsimile transmission, telex or personal delivery, on the date of actual
transmission or, as the case may be, personal delivery.
22. Further Actions. Whether or not specifically required under
the terms of this Agreement, each party hereto shall execute and deliver such
documents and take such further actions as shall be necessary in order for such
party to perform all of his or its obligations specified herein or reasonably
implied from the terms hereof.
23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF
THE STATE OF TEXAS.
24. Assignment. This Agreement is personal to Employee and may
not be assigned in any way by Employee without the prior written consent of
Employer. This Agreement shall not be assignable or delegable by Employer,
other than to an affiliate of Employer, except if there is a Change of Control
as defined in Section 16, Employer may assign its rights and obligations
hereunder to the person, corporation, partnership or other entity that has
gained such control.
25. Counterparts. This Agreement may be executed in counterparts,
each of which will take effect as an original and all of which shall evidence
one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
MILIRISK, INC.
By:/s/ F. XXXXXX XXXXXX, III
------------------------------------
Name: F. Xxxxxx Xxxxxx, III
----------------------------------
Title: Chairman, President and CEO
---------------------------------
EMPLOYEE:
/s/ F. XXXXXX XXXXXX, III
---------------------------------------
F. Xxxxxx Xxxxxx, III
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EXHIBIT A
PROHIBITED ACTIVITIES
Acting in any capacity, either individually or with any corporation,
partnership or other entity, directly or indirectly, in providing, or proposing
to provide, data processing software systems, related automation support
services and information services to the insurance industry, including, but not
limited to, application software, processing, consulting and related services,
in the performance of any of the following types of duties in any part of the
insurance industry:
1. The performance of the sales and marketing functions.
2. The responsibility for sales revenue generation.
3. The responsibility for customer satisfaction.
4. The responsibility for research and development of insurance
data base products.
5. The responsibility for the research and development of
information data processing systems and services.
6. The providing of input to pricing of products.
7. The planning and management of data processing services
resources.
8. The coordination of the efforts of the various aspects of
computer systems services organizations with other functions.
9. The planning and management of information services resources.
10. The providing and management of an operations staff to support
the above listed activities.
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EXHIBIT B
RESTRICTED AREA
Fifty mile radius of the city limits of the following cities:
Dallas/Fort Worth, Texas Milwaukee, Wisconsin
Boston, Massachusetts Sheboygan, Wisconsin
Columbia, South Carolina
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EXHIBIT C
CONFIDENTIAL INFORMATION
1. All software/systems (including all present, planned and
future software), whether licenses or unlicensed, developed by or on behalf of
or otherwise acquired by MiliRisk, Inc. or any of its subsidiaries.
"All software/system" shall mean:
o all code in whatever form
o all data pertaining to the architecture and design of
such software systems
o all documentation in whatever form
o all flowcharts
o any reproduction or recreation in whole or in part of
any of the above in whatever form.
2. All business plans and strategies including:
o strategic plans
o product plans
o marketing plans
o financial plans
o operating plans
o resource plans
o all research and development plans including all
data produced by such efforts.
3. Internal policies, procedures, methods and approaches which
are unique to MiliRisk, Inc. and are not public.
4. Any information relating to the employment, job
responsibility, performance, salary and compensation of any present or future
officer or employee of MiliRisk, Inc.
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SCHEDULE 3(b)
ANNUAL BONUS
% of net income target achieved % of Maximum Bonus
------------------------------- ------------------
More than Up to
--------- -----
100% or more 100%
90% 100% 90%
80% 90% 75%
70% 80% 60%
60% 70% 45%
50% 60% 30%
40% 50% 15%
30% 40% 10%
20% 30% 5%
20% or less 0%
16
SCHEDULE 3(c)
STOCK OPTIONS
BOOK VALUE OPTIONS
Number of Shares Exercise Price Date of Grant
---------------- -------------- -------------
Pre-Split Post-Split Pre-Split Post-Split
2,595 279,462 $140.00 $1.30 March 12, 1997
IPO OPTIONS
Number of Shares Exercise Price Date of Grant
---------------- -------------- -------------
Pre-Split Post-Split
6,055 652,077 Initial Price to Public Date of IPO
